Workshop of the world
31 Aug 2010
A headline-grabbing story of recent weeks was that China’s economy was now bigger than Japan’s. Of course, those figures hide a set of disparities and structural weaknesses but nevertheless China is now the pre-eminent subcontracting workshop of the world.
I attended an industry event in London recently and heard a managing director tell an audience of journalists that the subcontracting of certain manufacturing processes in China had not worked for his company. The price was good; but the quality was poor or rather the quality had initially been good but had slipped over time. This issue of so-called ’quality fade’ has been a prominent discussion point among many importers of Chinese goods and across the media.
Reading through a number of reports, it does seem that Chinese manufacturers view maintaining quality as a brake on greater profitability and the new Chinese capitalism is certainly one of the more rapacious breeds, with little in the way of legislation or control to hold it back.
Before we get too Western-centric about all this we would do well to remember that quality issues are endemic in every modern advanced economy, in business to business and business to consumer sectors - China is hardly unique in this.
The managing director mentioned above said that he had actually shifted back some of his subcontracted processes back to the UK. But Britain is not likely to become the workshop of the world anytime soon. Rather, one suspects that companies will carry on subcontracting to China as long the issue of ’quality fade’ does not reach critical mass. They, just like the Chinese, are more than a little bit interested in the bottom line.
Whether this means we get quality products is anyone’s guess.
Lyndon White
Editor, Processingtalk
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